Kenya: GDP growth weakens slightly in Q2
According to a preliminary estimate, GDP growth ebbed to 5.4% year on year in the second quarter, from 5.5% in Q1.
The agricultural sector grew 7.7% yoy in the second quarter, picking up from the first quarter’s 6.0% increase and marking the best reading since Q4 2020. Meanwhile, the manufacturing sector lost steam, growing 1.5% in Q2 (Q1: +2.0% yoy). Meanwhile, retail and wholesale trade sector growth moderated to 4.2% in Q2 from 5.7% in the previous quarter. Additionally, Q2 growth in transport and construction softened to 3.0% (Q1: +6.2% yoy) and 2.6% (Q1: +3.1% yoy), respectively.
On the outlook for 2023, analysts at the EIU commented: “A combination of fiscal and monetary tightening in Kenya, marked by higher taxes and interest rates, will push up borrowing costs, dampen credit uptake and impede consumption and investment […]. [However, a…] boost will come from a recovery in agriculture after two years of contraction, underpinned by near-average rainfall during the main wet season (March-May) and the prospect of better seasonal rains in the fourth quarter.”